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Former Minister for Trade

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Priorities and objectives for
participation in the Trans Pacific Partnership

Views expressed in public consultations

On 20 November 2008 in the margins of the APEC Ministerial
Meeting in Lima, Peru, the Trade Minister, Mr Crean, announced
that Australia will participate in negotiations for a
Trans-Pacific Partnership Agreement (TPP) expanding on the
current Trans-Pacific Strategic Economic Partnership Agreement
(Trans-Pacific Agreement) between Brunei Darussalam, Chile, New
Zealand and Singapore (P4), which entered into force in
2006.

The first round of TPP negotiations is planned for March
2009.

In line with the Government’s commitment to ensuring
Australia’s trade objectives are pursued on the basis of
full community consultation, public consultation on
Australia’s possible participation in the TPP commenced
on 3 October 2008.

The Department of Foreign Affairs and Trade, via its
website, called for public submissions on the expected costs
and benefits of participation and specifically invited comment
on the economic, regional, social, cultural, regulatory and
environmental impacts expected to arise from Australia’s
participation. In addition, consultations were held with
industry, business, community and labour representatives and
government agencies in meetings around the country, and with
State and Territory officials. The Department received
written submissions from a variety of stakeholders. All
non-confidential submissions received will shortly be available
on the Department’s website.

Overall, there is widespread interest in and support for
Australia’s participation in the TPP. Most
participants in the consultation process believe there to be
strategic benefits and potential for longer term commercial
gains. Input received through the consultation process
will inform the Government’s priorities and objectives
for Australia’s initial participation in the TPP
negotiations.

The Government is committed to conducting ongoing public
consultations with stakeholders throughout negotiations on the
TPP. The priorities and objectives, key points of which
are outlined below, will evolve to address developments in
negotiations.

Priorities and Objectives

Submissions identified significant strategic advantages for
Australia through participation in this Agreement, particularly
with respect to Asia-Pacific regional engagement. If
successful, it could promote the multilateralisation of
existing free trade agreements (FTAs). It could lay the
foundation for an APEC region-wide FTA as proposed by the
(Mortimer) Review of Export Policies and Programs, and
also contribute towards the Government’s vision of an
Asia-Pacific Community.

The stakeholder assessments of the costs and benefits
underlined the importance of Australia’s early
involvement and the benefits of active participation with our
regional neighbours.

Given Australia already has bilateral FTAs with New Zealand,
Singapore and the United States, and has concluded an FTA with
Chile, and a regional FTA including Brunei Darussalam, it is
anticipated that these agreements will provide a sound platform
for further engagement and trade liberalisation.

Strategic/Regional Advantages: Most participants
in the public consultation process saw the potential for the
TPP to form a building block for Asia-Pacific regional economic
integration and agreed that it was in Australia’s
interests to be involved from the outset in order to shape the
direction of the initiative. Confirmation of United
States’ involvement was seen as crucial to the initiative
going forward.

The Australian Industry Group noted that the negotiations
“which will hopefully lead to as broad an agreement as
possible, will be welcomed by the business
community”.

In the view of the Australian Sugar Industry Alliance,
Australia’s early “participation at the outset
would enable Australia to be involved in and influence the
development of the “ground rules” for the proposed
expansion of the Trans-Pacific Agreement.” ABB
Grain Ltd believes “that our involvement in this
agreement is necessary to ensure we are seen as a key partner
in the region and can influence the structure of trade
discussions relevant to the region.”

The Minerals Council of Australia concludes that “an
expanded Agreement would send an important signal to all APEC
members that greater region wide liberalisation and integration
is possible.”

Support for Australia’s involvement from a strategic
perspective was also received from the Australian Services
Roundtable, intellectual property rights groups such as the
Music Industry Piracy Investigations and the Screen Producers
Association of Australia and research institutes and academics
including the Institute for International Trade, and Dr Ann
Capling, University of Melbourne.

Commercial Potential: Participants were interested
in the prospects for further commercial market access gains
from existing FTA partners, and in the longer term, from other
regional trading partners should they decide to join. If
other regional countries are drawn into the Agreement over
time, this could lead to improvements in Australia’s
market access arrangements.

Participants are keen to ensure that market access gains
under the existing FTAs are preserved whilst recognising that
the near-term commercial gains under a TPP for Australia might
be expected to be limited given the quality of our existing
bilateral arrangements with the United States, current P4
members and now with Brunei Darussalam under the ASEAN
FTA.

Participants are seeking to strengthen trade opportunities
particularly with the United States as well as with Latin
America identifying in particular the potential for better
access for dairy products and mining services to Peru, a
country with which we do not have an existing bilateral trade
arrangement. A TPP provides a framework for engaging with
Peru.

The Australia Dairy Industry Council stressed that
“dairy must be at the heart of the initiative to
genuinely liberalise trans-Pacific trade.” They
specifically sought “A high degree of ambition in terms
of setting the parameters of agricultural and specifically
dairy trade liberalisation; that is elimination of all tariff
and non-tariff barriers to trade in as short a time frame as
possible.”

The Australian Sugar Industry Alliance Limited suggested
that further gains may be possible in an expanded Trans-Pacific
Agreement.

The Construction, Forestry, Mining and Energy Union (CFMEU)
argues for greater flexibility in government procurement
practices. The Government notes these views but must also
take into account the benefits for Australian businesses in
accessing free trade agreement partners’ government
procurement markets.

The P4 does not currently include chapters on financial
services, investment, telecommunications or e-commerce.
The Investment & Financial Services Association, which
represents retail and wholesale funds management,
superannuation and life insurance industries, endorsed the
inclusion of Investment and Financial Services chapters and
viewed the TPP as “an opportunity to improve access for
Australian financial services providers through mitigating
barriers” such as foreign restrictions on capital and
investment flows.

Other supportive submissions were received from the
Australian Tourism Export Council and Securency.

Cultural/Social: The CFMEU and the
Australian Fair Trade and Investment Network (AFTINET)
advocated the inclusion of labour standards in the TPP and
raised issues relating to the movement of natural persons and
the exclusion of public services. AFTINET also advocated
respect for human rights and the rights of indigenous
people.

The Government is conscious of the need to retain control
over the setting of domestic policy in particular with respect
to labour standards, environmental standards, the provision of
public services, immigration policy and indigenous people.

Regulatory/Environment: Some participants
cautioned that trade policy not undermine the ability of
governments to regulate in the public interest and in the
interest of protecting the environment. The CFMEU and
AFTINET raised concerns about investor-state dispute settlement
and the regulation of foreign investment. AFTINET also
urged that Australia’s trading relationships support and
strengthen multilateral environmental agreements.

Dr Ann Capling states in her submission that
“……participation in the TPPA would enable
Australia and the other signatories to make significant steps
towards addressing the discriminatory and systemic problems
posed by PTAs [preferential trade agreements]” such as
increasing regulatory costs. In her view, a common set of
Rules of Origin should be a key objective of the TPP.

Securency advocates the potential benefits of the
“harmonisation of IP, goods trade and investment
frameworks” in growing their business in Latin America
and Asia “as long as the framework extends to commercial
dealings with government as well as the commercial
sector.”

Both the CFMEU and AFTINET called for a more structured
community consultation process, greater Parliamentary
consideration as well as impact assessments in advance of a
decision to enter into FTA negotiations, including the
TPP. The Australia Dairy Industry Council called for
transparency and openness in government/private sector
consultation covering all aspects of the TPP initiative.
The Government in implementing this TPP consultation process is
seeking to address this call for wider, earlier and ongoing
public consultations.

The Government acknowledges the reservations of Australia
Pork Limited (APL). APL noted that our existing FTAs have
already delivered significant market access gains for
Australian pork, but is not in favour of participation on the
basis that FTA negotiating efforts should instead be focused on
China, Japan and Korea.

The Government will seek to ensure that the TPP negotiations
do not detract from our negotiations with other trading
partners and that all our trade negotiations whether bilateral,
regional or multilateral continue to achieve and promote
continuing trade liberalisation and exemplify Australia’s
strong commitment to open markets.